SELECTED THESES ON THE CIRCUMPOLAR ARCTIC

1. OUTLINE OF THIS STUDY
The purpose of this study is (1) to provide a framework for measurement of the economic impact of the development plans implemented by the Danish Government in Greenland in the period 1955-71, and (2) to evaluate the fulfillment of some of the main objectives of the development plans.
To meet the first purpose, a relatively simple OEEC type National Income Accounts system has been constructed for each of the years 1955-71. The construction of the NIA is described in Chapter II. The Accounts presented here constitute the first attempt to establish NIA for Greenland at a current basis. NIA calculations have been performed for Greenland before, but only for one year.
The evaluation of the development plans is undertaken in Chapter III, utilising the NIA figures from Chapter II. Chapter I describes the institutions created in Greenland with the purpose of developing the country economically.
The remaining sections of this introduction give a very brief description of the policy on which the economic development of Greenland was based and the problems which arose.

2. THE OBJECTIVES OF THE DANISH GOVERNMENT WHEN GREENLAND WAS A COLONY. THE INSTRUMENTS USED FOR THIS POLICY. THE CONSEQUENCES.
The objectives of the Danish Government regarding its economic policy with respect to the Colony of Greenland were twofold: (1) Greenland was to be kept isolated from the outer world, and (2) the expenditures of the Danish Government in Greenland were to be balanced by revenues derived from trade.
The instruments to implement this policy were: (1) Control of access to Greenland, and (2) A monopoly on trade with Greenland, controlled and later operated by the Danish Government.
The objective of a balance between expenditures and revenues was obtained by small expenditures by the Danish Government and by using the monopoly on trade to keep the prices of products bought in Greenland low.
The colonial policy was a success as regards the objectives mentioned. One consequence of this policy was, however, that the standard of living among the Eskimos remained extremely low.

3. THE TIME AFTER THE SECOND WORLD WAR. THE FIRST COMMISSION IN 1948. THE OBJECTIVES AND THE INSTRUMENTS.
During the Second World War, Greenland was exposed to the outer world by construction of American military bases in the country. Shortly after the war it was decided to develop Greenland into a modern industrialized society. The first Commission on Greenland was established in 1948 and its task was to define the objectives for Greenland and to point out how these objectives could be fulfilled. The most imperative objective was to increase the standard of living among the Eskimos in Greenland.
The philosophy of the policy was that the plans to increase the standard of living were to be accomplished in Greenland by local efforts assisted by Danes and Danish Government finance. The 1948 Commission suggested that the Danish Government provide the funds for a substantial investment program in Greenland.
Modern-type fishing is about the only 'natural' activity on which an economic development could be founded. Large shoals of cod were prevalent off the coast of Greenland and could be fished from relatively small fishing boats. It was suggested therefore that the Danish Government undertake the construction of plants for processing fishing products. A scheme for easy-term loans to Eskimos for fishing boats was drawn up. This was also to be financed entirely by the Danish Government.
Appropriate investments in hospitals, schools, roads, etc. were planned. The investments outlined in these plans as well as the operating costs of the institutions were to be financed entirely by the Danish Government. Investments in power plants, water supply, communications and traffic installations were on the Government budget, but the operation of these installations was aimed to balance economically.
In short, it was suggested by the Commission that the Danish Government provide for all investments (directly or by means of loans to private investors) and that the Government finance the operating costs of the public institutions (government consumption) in Greenland. The operation of the fishing industry, other business activity, utilities, etc. was to a large extent to be done by public enterprise, but it was supposed to be without direct subsidy from the Danish Government. This was done in order not to discriminate against private enterprise, the promotion of which was a prominent objective. The scheme was thus designed to start the economic development in Greenland in such a way that economic progress was dependent partly on the economic conditions in Greenland.
The recommendations of the 1948 Commission were implemented, but the pace was slower than anticipated.

4. REVISION OF THE POLICY IN THE EARLY 1960s. ACCELERATED DEVELOPMENT.
In 1960 another Commission started to revise the Greenland policy. It was obvious that the public enterprises were operating at a deficit and that the private businesses activity was much less substantial than anticipated.
The 1960 Commission suggested a very substantial acceleration of the economic development in Greenland. The same philosophy as described in the 1948 Commission's development plans was to be continued. The acceleration of the development required more Danish participation which created sociological problems since the Danes held most of the high ranking jobs in Greenland.
The hope was that the acceleration of the economic development would enable the economy of Greenland to obtain a state of sustained growth quickly and perhaps eventually a state of self-sustained growth. These two objectives were never explicitly expressed but it seems fair to interpret the long term objectives in that direction.
During the 1960s the climatic conditions changed and the impact on the fishing of cod was heavy. The cod disappeared from the coastal waters and the fishing industry had to prepare for the introduction of trawlers. This became the task for public enterprise but it took a long time to accomplish. The overall result of fishing was disappointing even though the fishing for shrimps and salmon was highly successful.
The private business sector grew substantially during the 1960s, especially in retail trade and construction, but the enterprises of immigrated Danes were dominant.

5. THE IMPASSE OF THE ECONOMIC POLICY IN GREENLAND IN THE EARLY 1970s.
By the early 1970s much had been achieved but there seemed to be a never ending need for Danish Government investments and finance for government enterprise deficits. The state of self-sustained growth of the economy of Greenland seemed as far away as ever.
No significant new development plans were designed and small cuts in the current rate of investment started in 1972. The state of affairs seems to be accepted by the authorities and the only hope for a substantial change is pinned on future economic activity in connection with the utilisation of mineral and possible oil deposits.